In the first decision regarding an administrative agency’s authority to deny permit applications based on New York’s Climate Leadership and Community Protection Act (“CLCPA”), Orange County Supreme Court in Danskammer Energy, LLC v. NYS Department of Environmental Conservation, et al., found that “the Department of Environmental Conservation has authority under § 7(2) of the [CLCPA] to deny a permit application, if warranted, based upon application of the same.” The Court made this June 8, 2022 ruling despite the fact that the Department of Environmental Conservation (“DEC”) has yet to promulgate specific greenhouse gas (“GHG”) standards and enforcement regulations as required under the CLCPA.
Brief Background
Danskammer commenced the hybrid action-proceeding against DEC, seeking to vacate the DEC’s October 27, 2021 denial of Danskammer’s application to modify its Title V air permit natural gas generating facility (the “Facility”). DEC denied the Title V permit application under CLCPA § 7(2) based on the Facility’s alleged inconsistency with achieving the CLCPA’s statewide GHG goals and Danskammer’s purported failure to show sufficient need or justification for the facility.
Decision
While Danskammer challenged DEC’s denial on multiple grounds, the most significant question before the Court was whether CLCPA § 7(2) alone authorizes DEC to deny permits.
CLCPA § 7(2) provides:
In considering and issuing permits, licenses, and other administrative approvals and decisions, including but not limited to the execution of grants, loans, and contracts, all state agencies, offices, authorities and divisions shall consider whether such decisions are inconsistent with or will interfere with the attainment of the statewide greenhouse gas limits established in article 75 of the [Environmental Conservation Law]. Where such decisions are deemed to be inconsistent with or will interfere with the attainment of the statewide greenhouse gas emission limits, each agency, office, authority or division shall provide a detailed statement of justification as to why such limits/criteria may not be met and identify alternatives or greenhouse gas mitigation measures to be required where such project is located."
While CLCPA § 7(2) applies to all state agencies, the law tasks DEC with promulgating regulations that limit GHG emissions under CLCPA. Under CLCPA § 2(e) / ECL § 75-0109, DEC must “promulgate rules and regulations to ensure compliance with the statewide emissions reduction limits.” Once established, these regulations will provide State agencies with the GHG limitation standards necessary for such agencies to comply with their obligations under Climate Act § 7 and will serve as the authority and performance standards to enforce legally the State limit by requiring control technology, source emission limits, and other mitigation.
Danskammer argued, in part, that without the enforcement regulations, DEC was without authority to deny its application under CLCPA § 7(2) alone (CPLR 7803 (2)), and/or DEC’s denial was made in violation of lawful procedure (CPLR 7803 (3)). The Court, however, disagreed. In reaching its decision, the court relied on settled canons of statutory construction, stating:
It is a fundamental and well settled principle that the primary consideration of the courts, in the interpretation and construction of a statute, is to ascertain and give effect to the legislative intent as expressed in the statute and that in ascertaining such intent the statutory language so utilized is to be construed in accordance with its ordinary and natural meaning without resort to artificial or forced construction. Because the clearest indicator of legislative intent is the statutory text, the starting point must always be the language of the statute itself, giving effect to the plain meaning thereof. And, while it is true that statutes are to be strictly construed, it is equally true that in determining legislative intent, statutory provisions are to be construed in such a manner so as to avoid conflict and to preserve the intent of the legislature, with the statute being construed as a whole, with its various sections considered together and with reference to each other. All parts of a statute must be given effect, and a construction which renders any part meaningless should be avoided. Where the language is ambiguous, a court may (and in this Court's view (is) compelled to) examine the statute's legislative history."
Interestingly, the Court agreed that “Danskammer is correct that the language of § 7(2) does not expressly authorize the DEC to deny a permit based on application of the same . . . ”. Nevertheless, despite acknowledging that statutes must be “construed in accordance with its ordinary and natural meaning without resort to artificial or forced construction” and only “[w]here the language is ambiguous, a court may ... examine the statute's legislative history,” the Court, still went on to examine the legislative history of the CLCPA without finding that the language of § 7(2) was ambiguous.
The Court justified its consideration of legislative history stating that while § 7(2) does not expressly authorize the DEC to deny a permit, it also “does not expressly preclude the same, or otherwise limit the DEC's authority thereunder until the promulgation of the rules”.
Ultimately, “to give Section 7 meaning,” the Court found that “the plain language of the statute must be interpreted to grant the DEC the requisite authority to deny a permit ...”, despite finding no ambiguity in the language of the statute, and agreeing with Danskammer that § 7(2) does not expressly authorize the DEC to deny a permit.
The Court’s decision was based on several policy considerations, including the Court’s finding that “there is immediacy to the legislation and language used” and the “conclusion to be drawn from the language used . . . is that the DEC is authorized to deny a permit” under CLCPA § 7 (2). On this point, the Court further notes that Danskammer’s interpretation that the plain language of CLCPA § 7 (2) does not authorize DEC to deny permits (which the Court agrees with) “would render the Legislature’s express mandate to reduce GHG emissions, despite its immediacy and urgency, completely toothless for years to come ....” Notwithstanding the Court’s characterization of the “immediacy and urgency” it reads into the statue, the CLCPA provides DEC four years to promulgate the enforcement regulations, after public workshops and consultation with the NYS Climate Council, various advisory groups, representatives of regulated entities and other stakeholders, and after no less than two public hearings (CLCPA § 2; ECL §75-0109 (1)).
Impacts to Industry
While this decision may have broad statewide impacts on all permitting decisions, it immediately impacts applicants for Title V permits or air state permits, and Title V or air state permits that seek to modify or renew such permits. Until DEC promulgates the GHG emission standards and enforcement regulations, applicants for such permits and permit renewals no longer have quantifiable metrics to determine whether its activities would be consistent with GHG limitations. The lack of quantifiable metrics and standards could lead to extended permitting timeframes, increased need for administrative adjudication for permits, and increased costs.
